Inc. Southeast Asia

3 Hottest Trends in AgTech in Southeast Asia

With Southeast Asia producing almost 90% of the world’s palm oil and about a quarter of the world’s rice, AgTech or agricultural tech is one of the biggest opportunities for start-up innovation in the region. Be it drones or soil and crop technology, the region has lots to gain from yielding a better crop. Here are the three hottest trends in Southeast Asia’s burgeoning AgTech space:

1. Bringing The Farm Closer

Indonesian company i-Grow has come up with a novel way of using underutilized land, which is to get you to do the farming. Not literally by using a plow, but by investing in seeds. The basic premise is that you buy seeds, follow the plant’s growth through their app and when harvest day comes, cash in on your returns.

A one-time $1,213 investment in peanuts could produce a return of 9-13% in 6 months, according to their website. Not bad for just watching a plant grow via your iPhone.

i-Grow, which has planted over 10 million trees, preys effectively on many city-dwellers’ yearning to be closer to nature. Along with recent fads such as farm-to-table restaurants and vertical gardening, i-Grow is right on trend, while also promising a handsome financial harvest.

2. Slashing Loan Costs

It may seem counter-intuitive that technology could lower financing costs. After all, technology itself can be pricey. But Indonesia-based CI Agriculture hopes their data will do just that -- lower financing costs for farmers.

One peculiarity about Southeast Asian farms is that the land is often apportioned to many small-holding farmers. Farmers who cannot afford land are charged high interest on loans, sometimes reaching eye-watering figures like 40%.

To be able to accurately guess the output of a plantation can act as a “kind of credit scoring’’, says Aria Alfie Nurfikry of corporate strategy development at CI.

The company uses satellite, drone, and sensor data to understand a field’s potential--be it in terms of soil, weather or other factors. On one of its pilot programs, CI has been able to increase the yield at a corn plantation by over 60% and reduce the farming input, including getting rid of chemical waste, by 25%.

3. Eyes From Above

While drones can be lots of fun to spy on a prickly neighbor or take cool aerial pics, these powerful machines also have many practical functions, particularly in the field.

“There are two main problems in agriculture that everyone is trying to correct, rising costs and yields not rising enough to match global demand for food,’’ says Mark Yong, CEO of Singapore-based Garuda Robotics.

Yong’s company uses drone technology and data systems to produce customized solutions to combat these problems, and has worked with 25 different companies in the last 18 months.

Growing palm oil, which produces cooking oil and even soap, can be rather costly as 40-55% of maintenance cost is sometimes spent on fertilizers treating soil that may not be naturally fertile. Or farmers may be piping pesticide on large swathes of land, in order to catch a disease before it becomes widespread.

“The big question is do you actually know what’s happening on the ground?’’ asks Yong. His company can use drones to pinpoint fertile or diseased land.

Agriculture in North America and Europe are already dependent on software, while in Australia the process is much more mechanized. Yet in Southeast Asia there is still a woeful dependency on human labor.

With concerns growing around the world about how to feed 9.7 billion people in 2050, and the economies of so many Southeast Asian nations dependent on back-breaking agriculture, the region needs to increase efficiency fast. And AgTech may be the region’s best bet.

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Inc. Southeast Asia is the sole Southeast Asian licensee of Inc., the world's leading media brand for entrepreneurs and start-ups. We are committed to two ideas. First, as entrepreneurs and start-ups within Southeast ...
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